Brightcove Inc. (NASDAQ:BCOV)

Brightcove Inc. (NASDAQ:BCOV) continues to feel the wrath of the Street after posting first quarter revenues of $37.6 million against analysts’ estimates of $37.4 million. The sudden change in investor’s sentiments comes on the company missing estimates on earnings per share as well as on guidance.

Brightcove Mixed Financial Results

A net loss of $0.08 a share was worse than a $0.04 a share loss, analysts were expecting. Net loss for the quarter came in at $5.1 million – more than double the net loss of $1.5 million reported the same quarter last year. While the company ended with 4,411 customers compared to 2,021 the previous year, revenue per premium customer shrank to $67,000 compared to $69,000 a year earlier.

During the quarter Brightcove Inc. (NASDAQ:BCOV) unveiled a new API-driven platform dubbed Brightcove Live that is designed to augment live streaming with server-side ad insertion. The company also added Diane Hessan to its board of directors.

Growth Prospects Concerns

According to the chief executive officer David Mendels, the mixed first quarter financial results were down to a revenue mix shift and unanticipated one-time costs.

“In addition, while we had strong year-over-year bookings performance in the quarter, we experienced a significant and unanticipated decrease in our revenue retention rate, among media customers, primarily due to changes in the market for the non-software elements of content delivery and storage, “said Mr. Mendels.

Even after the remarks, investors continue to question the company’s growth prospects. Brightcove Inc. (NASDAQ:BCOV) says it expects revenues of between $37 million and $37.8 million for the second quarter against analysts’ estimates of $39 million. For the full year, the company says it expects revenues of between $151 million and $155 million against analysts’ estimates of $164 million.

Prior to Brightcove Inc. (NASDAQ:BCOV) reporting the mixed first quarter financial results, the stock had been on an impressive run having surged by more than 8% since the start of the year. The stock was also up by more than 40% for the past 12 months. It appears investor sentiments on the stock are slowly turning sour, the stock having shed more than 30% in Friday’s trading session to close the week at lows of $6.025 a share.

Concerned by the change in investor sentiments, the chief executive officer has sought to reaffirm the company’s growth prospects by reiterating that they are on course to achieve double-digit percentage revenue growth next year.

I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 96 hours. All information, or data, is provided with no guarantees of accuracy.

About the author: Monica Gray has an undergraduate degree in Accounting and an MBA – earned with Honors. She has six years of experience in the financial markets and has been a securities analyst for the past two years.

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